https://www.youtube.com/watch?v=V4g1wwB5JCA
Oakland News Now –
Howard Terminal Ballpark Update: Letter To Mayor Schaaf, CMs, Alameda County Details Info Problem
– video made by the YouTube channel with the logo in the video’s upper left hand corner. OaklandNewsNow.com is the original blog post for this type of video-blog content.
Howard Terminal Ballpark Update: Letter To Mayor Schaaf, Oakland Councilmembers, Alameda County Supervisors Details Info Problem In Livestream Talk
This was sent to Oakland Mayor Libby Schaaf and Oakland City Councilmembers and Alameda County Board of Supervisors Members, as well as Mike Jacob, the lawyer for the Oakland Longshoremen.
Dear Mayor Schaaf,
I hope this finds you well. I just read the latest City of Oakland Website Howard Terminal entry and it reads as tantamount to a lie. I am so sorry but that term sadly fits. The reasons are simple.
First EIFD law does allow for financing of Howard Terminal Infrastructure. The money that was to be paid to the Oakland A’s for infrastructure is covered in SB 293 Skinner. It’s also a basic subsection of EIFD law.
Bottom line tax increment financing can be used to pay for Howard Terminal Infrastructure. Your “Facts vs. Claims” post dated October 20th 2021 implies otherwise. Specifically, this entry:
The public dollars generated by this private development will be expended FOR public benefits, not the other way around. Under state law, EIFD funds can only be spent on affordable housing and public improvements of communitywide significance.
Given the way the law reads, specifically SB 293 Skinner, that is completely wrong. In other words, Under state law, EIFD funds can be spent on affordable housing, highways, streets, child care centers, water reclamation, sea-level-rise mitigation, public improvements and a giant list of uses in the district and outside of it and in the “community”, as long as the infrastructure financing plan says they are of of “communitywide significance.”
Thus, getting the County share of TIF will cause the County to essentially help pay for Howard Terminal. That’s a fact.
Also there will not be the $65 million in tax revenue from development at Howard Terminal simply because there is no actual financing plan or developer partner to build the claimed additional land use. You can not guarantee what you do not have.
UPDATE: Howard Terminal Ballpark Project Presentation To County Lacks Legally Required Infrastructure Financing Plan.
And that’s the other problem encapsulated within the information deficiencies that exist. In short, the City of Oakland has no plan for spending tax increment financing revenue, even as its poised to ask for the County of Alameda to participate in the Howard Terminal Project IFD by committing its percentage share of property tax from Howard Terminal. The Infrastructure Financing Plan is called for as a standard part of the EIDF process and is spelled out in the case of SB 293 Skinner 56 times. The Infrastructure Financing Plan governs where monies are spent, and should include the community’s plan; at this point, the City of Oakland has not presented a complete Infrastructure Financing Plan. It does not need Alameda County to make one, but Alameda County should see one if only to understand where its money is going as a taxing agency. Here’s a good example of an Infrastructure Financing Plan: Samoa Peninsula EIFD IFP Draft 1.
The Problematic Center Urban Reports
The central problem at play here is the Center Urban Report documents here and here. I realize Center Urban was only producing an analysis based on the City’s direction, so it’s not really the fault of the firm, but the information is produced by it.
What follows are the proposed land uses provided in the document by Center Urban:
Table 1. Project Program
Use GSF/ Units
/Hotel Rooms Apartments – Market Rate 1,416 Units
Apartments – Below Market Rate 450 Units
Condominium – Market Rate 1,134 Units
Office 1,497,000 GSF
Retail 252,600 GSF
Hotel 400 Rooms
Performance Center 39,000 GSF
Ballpark 1,200,000 GSF
Project Phasing
Per the A’s development program, the Project will be constructed in multiple phases over an
approximately 10-year period. Provided below is a summary of the anticipated building
construction phases.
Table 2. Project Construction Phasing
Phase Uses
Start of
Construction
End of
Construction
Phase 1 Ballpark 2025 2026
Phase 2 Apartments, Retail, Hotel 2026 2028
Phase 3 Apartments, Condominiums, Retail 2028 2030
Phase 4 Apartments, Condominiums, Retail 2030 2032
Phase 5 Condominiums, Office, Retail 2032 2034
Phase 6
Condominiums, Office, Retail, Hotel,
Performance Center 2034 2036
Ok, while The Center Urban document does include the document square feet of the projects and the phasing, it makes a major error in not estimating the per-building assessed value, and causing the total to equal $12 billion – the total value amount of the project according to The Oakland Athletics. That $12 billion in value yields a tax increment greater than $9 billion over a 45 year period, assuming 4 percent annual rate of growth in assessed value.
So what is it? It’s clear to me the Center Urban document does not accurately reflect 1) the Athletics project at full buildout, or 2) SB 293 Skinner.
The reason I state that is SB 293 Skinner, which Oakland Athletics President Dave Kaval says the organization wants to use considering the trouble it went through in getting the legislation passed, is not being followed by the City of Oakland.
Consider what SB 293, Skinner SECTION 1, (e) says…
It is therefore the intent of the Legislature to provide the City of Oakland, hereafter referred to as the city, with additional latitude, within the framework of the laws governing IFDs, to create and operate an IFD in a manner that optimizes its financing options to facilitate the construction of much needed public facilities and affordable housing meeting the stated goals of communitywide significance. The city may wish to establish an IFD at Howard Terminal or another location. This will spur private investment and provide additional dollars to support development and revitalization of urbanized areas that include housing for all income levels with equal access to public transit, goods, services, and economic opportunities. In order to adapt the provisions of Chapter 2.8 (commencing with Section 53395) of Part 1 of Division 2 of Title 5 of the Government Code, relating to infrastructure financing districts, to the unique circumstances within the city, a special act is necessary.
Where “IDF” is “infrastructure financing district”. SB 293, Skinner then allows for the “infrastructure financing district” to use tax increment financing, and then use that revenue outside the boundaries of the district.
Then consider how SB 293, Skinner SEC. 2 Section 53395.82 reads.
(a) This section applies only to the City of Oakland and any infrastructure financing district proposed by the City of Oakland, as described in this section.(b) In addition to the findings and declarations in Section 53395, the Legislature further finds and declares that consolidating in a single agency the ability to capture property tax increment revenues to finance qualified public facilities in the City of Oakland will provide communitywide benefits.
Note SB 293, Skinner SECTION 2, (d) 1:
(d) (1) A district may finance the design, purchase, construction, expansion, improvement, seismic retrofit, or rehabilitation of any real or other tangible property with an estimated useful life of 15 years or longer, as described in this chapter. The facilities need not be physically located within the boundaries of the district. However, any facilities financed outside a district shall have a tangible connection to the work of the district, as detailed in the infrastructure financing plan adopted in accordance with subdivision (e). Subdivision (b) of Section 53395.3 shall not apply to the district, but the district shall only finance public facilities of communitywide significance that provide significant benefits to the district or the surrounding community.
Where the City of Oakland’s approach calls for an over-lay district approach, that’s not the way SB 293 Skinner (again, what the A’s want to use) is written. It very simply allows the creation of one district, then the use of tax increment financing in that district finance a wide variety of projects outside that district, as long as they are spelled out in the industrial financing plan. There’s no reason, especially given SB 293 Skinner was formed specifically for Howard Terminal, for some hybrid legislation to be used, let alone having two zones. Given that the money partly goes to the A’s for infrastructure, that sets up the climate for a private activity bond. Such a bond issue is such that if a default occurs, the developer – the Oakland A’s – pays for the cost. In past examples, the bond underwriter just simply restructured the bond issue. That was the case in the matter of The Harris County Stadium Authority in 2008.
Will The Structures Be Required In The Howard Terminal Development Plan And What Assurances Do We Have That They Will Be Built? Will The Plan Allow A Master Developer / Developer Partner Structure?
If the development agreement calls for the office structures to be built (does it?) who pays when they are not? What’s the punishment for not acting? And how can you make someone spend money they do not have? And that leads me to this:
The Oakland A’s are not shown in any document to be expected to pay property taxes on the ballpark. Since the ballpark itself will clock in at north of $1 billion, that’s a substantial loss of potential tax increment revenue. If its matched with an additional $1 billion of assessed property value at base year one, over a 45 years period and at a rate of growth of assessed value of 4 percent (the Jack London Square Historic Average is 6.5 percent) that comes to $1.6 billion. And that’s without using the base year tax divisions; added and we see $2.6 billion. (Remember I made my own Howard Terminal project spreadsheet for anyone to use.). In other words I just gave you a TIF revenue estimate without the other building projects. This includes what we know will be built: the ballpark, plus $1 billion more in AV. Since there is no larger TIF zone used, we have to engineer the building of that additional $1 billion in assessed value.
Without it, we are looking at $800 million in TIF Revenue from the ballpark alone. That boils down to a top-end $400 million bond issue and $200 million of that to the A’s.
So the Howard Terminal Project NEEDS a development partner, now. Otherwise those land use targets will not be met. The City of Oakland must find that partner now. Do a symposium to sell that to interested parties as I did for Mayor Brown’s 10 K Project.
In closing, your so-called consultants did not calculate tax increment financing revenue scenarios. The September 24th Centre Urban Document does not show that at all. If you think so then its clear you do know what TIF estimates look like or why, and are just winging it. Please stop.
In Other Words Center Urban Just Posts Numbers That We’re Supposed To Believe Are The Tax Increment Without Sharing What The Assumptions Are That Got Us There. It Also Refers To Existing RDA’s Without Background. In Short There’s Not The Expected Time-Series Spreadsheet That Simply Shows Annual And Total Tax Increment Revenue
Ms. Mayor, There is no excuse for this continued malpractice and its clear that fear of public reaction to the level of subsidy has guided your actions rather than a detailed understanding of what the law permits such that you can sell the public on the project, with the subsidy.
Your actions in using this approach Ms Mayor are dangerous and could wind up stalling the Howard Terminal Project via a lawsuit. My fear that you are creating such a climate is spurring me to act yet again.
Please stop the unnecessary smoke and mirrors approach to this much needed project. I urge the County to get behind it, but that’s no reason to try and bamboozle Alameda County Supervisors. That’s what’s going on right now, and has been the case since 2019. That was when one of your Assistant City Administrators said that we should have lunch “and talk about what is going on” after not allowing me to talk with Chinatown Town Hall Attendees about tax increment financing revenue from Howard Terminal at Councilmember Bas’ event on November 20, 2019. Video:
So, in closing, the Howard Terminal Project is still in a real mess, and it’s clear a complete understanding of what the SB 293 Skinner legislation reads and permits is necessary before we go any further. What the consultants are presenting is not consistent with SB 293 Skinner, and does not appear to pass the basic logic test.
Best regards,
Zennie Abraham
CEO,
Zennie62Media, Inc.
Founder and Former Director of The Oakland Alameda County Sports Commission and The Super Bowl XXXIV Bidding Committee.
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